The Philadelphia School District is poised to expand programs that deal with dropouts or students in danger of dropping out while it reduces the number of spots for students with discipline problems.

If a recommendation made to the School Reform Commission yesterday is approved next week, the district will more than double the seats in its alternative-education program, from 1,275 to 2,755 next year, and cut the number of disciplinary seats by nearly a third, from 3,150 to 2,240.

Such a shift is possible because fewer disciplinary spots would be needed, district staff said.

Furthermore, focusing on dropouts or those in danger of dropping out would address a graduation rate that is among the worst in the country - about 50 percent.

Superintendent Arlene Ackerman, who earlier in the year introduced a zero-tolerance policy toward school violence, said last night that she believed a reduction in seats for disciplinary placements was the right move.

"We're hopeful we won't need those spots," she said, adding that the district reinstated in-school suspensions as a tool to deal with problem students.

Despite the expansion in seats, the district will spend $49.7 million on alternative education next year, only about $5 million more than it is paying this year. Almost all of the district's alternative-education services are provided by contractors, and officials said they had negotiated tougher contracts with these providers to achieve savings.

Providers would also be given annual ratings ranging from unacceptable to exceptional. Those judged unacceptable would lose their contracts.

Overall, the commission would award $45 million in contracts to providers to run disciplinary and accelerated programs and "oasis" programs, which would be inside neighborhood high schools and target at-risk students.

District staff would run the so-called Apex Programs, schools for expelled students and those awaiting disciplinary hearings.

In all sectors, there would be a renewed emphasis on math and reading skills, daily attendance, participation and score growth on state tests, and scholastic success, officials said.

The move would mean a contract windfall for some providers and a sharp decline for others. Camelot, which has 950 students in alternative-education and disciplinary schools, would serve 1,550 and be paid $15.8 million. Community Education Partners, which serves 1,850 similar students, would be awarded a contract to serve 1,050.

The commission was scheduled to vote on the alternative-education contracts yesterday, but Commissioner Johnny Irizarry spearheaded a move to table the vote, saying he wanted more time to consider the resolution.

The commission also heard from two education advocates who said the district is flouting state law when expelling students.

Under Ackerman, the district moved this year to begin expelling the most violent students. But two lawyers from the Education Law Center who have represented students say the district is breaking state law by not holding informal disciplinary hearings before transferring students to alternative placements.

State law gives the district 15 days to hold the hearings, which precede formal expulsion hearings. The attorneys said their clients - and others - never had the informal hearings and wait months before their cases are considered.

They also criticized the zero-tolerance policy as overbroad.

Ackerman acknowledged that the expulsion hearing process was "not a smooth process in the beginning" because the district hadn't expelled any student for three years, but she said things were improving.

Still, she said, "we don't have a perfect system, but we're not going to let a few children make a school unsafe."